Regulatory challenges and solutions: AIFMD II

In 2023, AIFMD II is still being negotiated between EU institutions. How can a Fund manager comply with the new requirements?

Road to 2025: upcoming regulatory changes

In November 2021, the European Commission proposed a draft revision of the Alternative Investment Fund Managers Directive (AIFMD II). This revision aims at introducing new harmonised rules at the European Union (EU) level in different areas, such as

  • Loan-originating funds
  • Minimum substance of the asset manager
  • The use of Liquidity Management Tools (LMTs)

As of March 2023, AIFMD II is still being negotiated between EU institutions.
As a result, AIFMD II may enter into force in 2025, which means that managers of Alternative Investment Funds (AIFs) and UCITS would have to comply with those requirements by 2026.

How can Securities Services help?

As a European leader in asset servicing, and in particular depositary services and regulatory reporting services, we are best positioned to help managers of AIFs and UCITS to comply with AIFMD II.

Our local presence and expertise in key European jurisdictions and our large range of fund services make us your ideal partner to support you through AIFMD II new requirements.

New requirements

Our solutions

Liquidity management tools (LMTS)

Alternative Investment Fund Managers (AIFMs) who manage open-ended AIFs must select at least one Liquidity Management Tool to be used in exceptional cases such as:

  • Swing pricing
  • Anti-dilution levy
  • Notice periods
  • Redemption gates
  • Temporary suspension of orders
  • We manage all the Liquidity Management Tools (LMTs) types required by AIFMD II
  • These services are available in all EU jurisdictions for UCITS and AIFs
  • Our LMT services are already compliant with local regulatory standards in France and other EU jurisdictions

Reporting requirements

AIFMD II introduces new reporting requirements for UCITS and includes new reporting obligations for AIFMs on their originated loan portfolios

Depositary services

AIFMD II clarifies that, when acting as a custodian, an Investor Central Securities Depository (CSD) is considered as a delegate of the depositary bank

  • We already consider Investor CSDs as our delegates, when we act as depositary of Alternative Investment Funds and UCITS
  • We were awarded as the Best Depositary Solution in 2020 (HFM European Hedge Fund Services Awards)

Loan originating funds

  • AIFs will be authorised to originate loans based on certain conditions
  • Our loan solutions help AIFMs to close their deals, monitor their loan portfolios and provide detailed reports.
  • This solution is fully embedded within a broader Private Debt offer, spanning across fund servicing and financing